Merit MH Classes Downgraded

Three classes of Merit Securities Corp. manufactured housing contract series 12-1 have been downgraded by Fitch Ratings.The downgrades were as follows: class M-1, from AA to A; class M-2, from A to BBB-minus; and class B-1, from BBB to BB-minus. (The rating on class A3 of the deal was affirmed at AAA.) Fitch said the downgrades reflect the poor performance of the collateral pool as well as expected loss levels. "The manufactured housing industry is experiencing its worst downturn ever," the rating agency said. "Relaxed credit standards, overbuilding by manufacturers, and the difficulties relating to servicing this unique asset have all contributed to poor performance of MH securities. Fitch believes the industry will continue to struggle for some time." Fitch can be found online at http://www.fitchratings.com.